Replies to post #248311 on Innovation Pharmaceuticals Inc (IPIX)

[Yooper61]

I thought you previously agreed with me… It’s pretty clear from below, that the purchasers can’t sell converted shares or short for 90 days:

Exhibit D of the Purchase Agreement: Pursuant to the Purchase Agreement, the undersigned irrevocably agrees with the Company that, from the date hereof until ninety (90) days following the first closing date of the Company’s offering of registered securities pursuant to an effective shelf registration statement on Form S-3 (File No. 333-220419) and the Purchase Agreement (the “Offering”) (such period, the “Restriction Period”), the undersigned will not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any Affiliate (as defined in the Purchase Agreement) of the undersigned or any person in privity with the undersigned or any Affiliate of the undersigned), directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to, any shares of common stock of the Company or securities convertible, exchangeable or exercisable into, shares of common stock of the Company beneficially owned, held or hereafter acquired by the undersigned (the “Securities”); provided, however, that the foregoing prohibition shall not apply to sales of shares of the common stock of the Company made pursuant to a valid contract, instruction or plan that satisfies the requirements of Rule 10b5-1 under the Exchange Act (a “10b5-1 Plan”), provided that such 10b5-1 Plan existed or was entered into prior to the date hereof and provided that such sales were made at $2.00 (as adjusted for reverse and forward stock splits, recapitalizations and similar transactions following the date hereof) or higher.

Your quote:
The Lock-up Agreement allows for "this activity" if it occurs under a 10b5-1 plan (basically a plan to sell shares created when the holder is not in possession of material non-public information) at a price over $2, so that term of the Lock-up isn't likely to be meaningful (at least in the near term). I also have the feeling that the MFO didn't set up a 10b5-1 plan for this transaction, but that's just my speculation....generally such a plan locks the entity into selling and MUST be implemented.

I take issue with your conclusion “isn’t likely to be meaningful”. The 105b-1 exception is NOT a factor in the recent selling (which is what we are talking about), because the sp is under $2.00…period. I do agree with your speculation that the MFO didn’t set up 105b-1 before they were in possession of material non-public information.